Global Economics

Motorola Exec Sees $15 Phones by 2008

Ultra low-cost handsets for the developing world are possible given cheaper manufacturing, says the company's British chief. Next, luxury taxes must not apply

Mobile phones costing less than $15 will be available in developing countries by 2008, Motorola UK chairman Sir David Brown has predicted.

If handsets can be delivered that cheaply, it could lead to another 100 million people a year getting their first phones, he said.

The thrifty price tag on the ultra low-cost handsets is partly due to chip manufacturers committing to the supply of cheap silicon, Brown said.

Speaking at the Institution of Engineering and Technology (IET) Brown said: "It's beginning to look as if sub-$15 mobile devices might be achievable by around 2008."

Other projects aiming to bring high-tech hardware to the developing world have met with a mixed response, but Brown pointed out a study by the London School of Economics that "found a 10 per cent increase in mobile penetration creates a 0.6 per cent increase in gross domestic product."

Brown said: "In absolute terms that's a huge number. It's about a fifth of the average annual total global GDP growth."

Brown said developing countries' governments now need to be persuaded not to tax mobile devices as luxury goods.

He said in 14 out of the 50 developing countries the GSM Association surveyed, taxes represent more than 20 per cent of the total cost of owning and using a mobile device.

Brown said: "The association's economic experts believe that if ultra low-cost mobile devices could be exempted from import duties and sales taxes, up to 930 million additional ultra low-cost mobile devices could be connected in the 50 developing countries they studied, between now and 2010."

He added: "It's all too easy for those of us who live with seamless mobility every day to become blasé about it. Until we think about using seamless mobility to bridge the digital divide."